Rahmi Lestari Helmi, Ananda Sabil Hussein, Radityo Putro Handrito, Galuh Syahbana Indraprahasta
Digital technology advancement, especially artificial intelligence (AI), reshapes global manufacturing; its potential for driving sustained competitive advantage (SCA) remains contingent on firms' absorptive capacity (ACAP). Yet, the mechanisms linking AI, ACAP, and innovation outcomes are fragmented in the literature. This systematic literature review (SLR) synthesizes evidence on how AC mediates AI's impact on innovation and SCA in manufacturing, with emphasis on green knowledge management (Green KM) as a catalyst. Following PRISMA 2020 guidelines, we analyzed 80 peer-reviewed studies (2015-2025) from Scopus and Web of Science. Thematic coding and cross-sector comparative analysis were applied to extract AI-ACAP pathways, innovation outcomes, and SCA indicators. Our findings revealed that ACAP is the critical mediator converting AI into innovation and sustained competitive advantages in 72% of studies. Green KM transforms AI from an efficient tool to a sustainability enabler by 37% such as carbon neutrality, and reduces clinical waste by 28% in healthcare. ACAP isn't just a facilitator-it's the engine converting AI into innovation. We proposed a Green ACAP framework integrating sustainability into knowledge routines, offering pathways for resilient innovation. Manufacturers must prioritize ACAP microfoundations (e.g., assimilation training) over AI procurement, while the Health system embeds compliance into AI assimilation routines. © 2025 IEEE.
Brawijaya University, Faculty of Economics and Business, Malang, Indonesia; Research Center for Economics of Industry, Services, and Trade, National Research and Innovation Agency (BRIN), Jakarta, Indonesia; Research Center for Population, National Research and Innovation Agency (BRIN), Jakarta, Indonesia
